Digital Marketing Tools Improve Performance

By Samuel Greengard

The intersection of information technology and marketing is proving nothing short of revolutionary. Digital wallets, social media, transactional marketing techniques and big data are creating a spate of new business capabilities … and new challenges.

“Companies that are more aggressive about adopting today’s digital marketing tools are seeing improved financial performance,” notes Jay Henderson, global strategy program director at IBM Enterprise Marketing Management. “There are clear differences between leaders and laggards.”

IBM examined the behavior and actions of 362 marketing professionals as part of an August 2012 study, “Why Leading Marketers Outperform.” Amid a growing array of marketing channels, there’s a need to think and act differently. No longer is brand building dictated solely by organizations. It’s a bi-directional relationship defined by customer dialogues and a more dynamic form of communication.

The upshot? Companies with progressive marketing organizations currently experience a three-year compound annual growth rate that’s more than 40 percent higher than their counterparts. The study also found that gross profits at these successful firms are growing at double the rate of their peers.

The report shows that successful firms typically take a more analytical and cooperative approach to marketing. They tend to incorporate line-of-business peers into processes and include their input in marketing strategies. Many of these organizations, Henderson says, also rely on a high level of coordination across departments in order to build better marketing and business tools.

In fact, 91 percent of organizations that IBM identifies as “leaders” give marketers a high level of influence over promotional activities, while only 79 percent of marketers at other organizations say they’re in the loop. In addition, 71 percent of these firms encourage marketers to take ownership over products and services, compared to 48 percent at other organizations. Finally, 62 percent of the most successful businesses allow marketers to play a key role in pricing decisions, versus only 41 percent at other organizations.

Best-practice organizations also are more likely to rely on specific channels and tie them together more holistically. They use Websites for marketing at an 8 percent higher rate; focus on call centers and customer service functions at a 12 percent higher rate; use social media at a 13 percent higher rate; and tilt toward mobile channels 9 percent more often than the typical business. What’s more, leaders also use mobile messaging campaigns, geo-location tools, targeted mobile ads and social networking sites at higher rates.

The bottom line is that successful organizations establish a system of engagement that yields quantifiable outcomes, Henderson says. They deploy technology and processes in order to automate, deliver, guide and accurately measure the impact of marketing actions across all channels. They also encourage innovation, measure what really matters, and foster collaboration between IT and marketing.

In the end, this coordinated approach allows these firms to engage with customers in a personalized way and make more informed investments that lead to greater ROI. It also helps overcome basic but formidable challenges, including coping with legacy IT infrastructure and limited budgets.

“It is important for marketers to deal with a growing and increasingly complex array of channels,” Henderson explains. “Organizations must find ways to put today’s digital marketing tools at the center of the business.”